Sullivan County Manager Joshua Potosek has proposed a 2027 budget with a 27.67% property tax increase, citing declining sales tax revenue, rising operating costs and the need to preserve the county’s financial reserves.

The tentative budget, released Friday, seeks to maintain current programs, services and staffing levels without relying on the county’s fund balance to offset expenses.

“The proposed tax increase is due to steeply rising, inflation-fueled costs and an anticipated $6.5 million decline in sales tax revenue versus what was budgeted in 2026,” Potosek said in a statement.

The anticipated sales tax shortfall and the decision not to draw further on the county’s reserves account for 15.5 percentage points of the proposed tax increase, he said.

Dan Hust, Communications Director for Sullivan County Government, said the county had initially projected a property tax increase of about 35% during budget planning. Efforts to contain spending helped bring the proposed increase down to 27.67%, he said.

Sales tax decline adds pressure

Sales tax revenue has become a major challenge for Sullivan County. The county experienced the steepest sales tax revenue decline in New York during the first half of 2026.

READ: Sullivan County faces steepest sales tax decline in New York for first half of 2026

Hust said a decline in sales tax revenue from building materials was a particular concern. County officials are working with suppliers and purchasers to ensure sales taxes are properly credited to Sullivan County, he said.

The county also faces inflation-driven expenses and rising employee health insurance costs. Hust said the county is moving to a self-insured health plan that is expected to increase premiums by 25%, compared with a projected 35% increase under its previous insurance arrangement.

Other budget pressures include $800,000 in new costs associated with the Supplemental Nutrition Assistance Program, or SNAP, stemming from changes in federal policy, Hust said.

Potosek’s proposal does not call for cuts to county programs, services or employees. Hust said the county has limited hiring to essential or grant-funded positions and directed departments to hold the line on spending.

A different budget debate from last year

The proposed increase marks a sharp contrast with the county’s adopted 2026 budget, which carried a 2% property tax increase.

Last year, Potosek recommended a 9.1% increase to address an anticipated $5 million sales tax shortfall. Legislators instead approved an amended $305.7 million budget with a 2% increase in a 5-3 vote, following significant public opposition.

“These amendments are reckless. It’s going to be putting the county next year in a worse position than we are today,” Legislator Joe Perrello said in 2025.

The current proposal also raises questions about how the county can broaden its revenue base and reduce pressure on property taxpayers. Hust said attracting businesses that employ significant numbers of workers will be important to that effort.

He pointed to plans to extend water and sewer infrastructure near Old Route 17 in Ferndale and Liberty to prepare sites for development, as well as the anticipated reopening of the former Frito-Lay plant in Liberty.

What happens next

The tentative budget now goes to the Sullivan County Legislature for review and possible amendments. Legislators must adopt a budget by Dec. 20.

Public hearings are expected in December, although dates have not yet been scheduled. Residents can also submit written comments to the clerk of the Legislature for inclusion in the public record.